EIB Issues Debut USD Global Callable Transaction

The European Investment Bank (EIB), rated AAA/Aaa, successfully priced its Debut $1 billion USD Global Callable transaction today, via Lead-managers Bear Stearns and Goldman Sachs.

The deal has a 3-year maturity with a non-call 2-year structure and priced at par with a 2.35% coupon and 75.4 basis point spread over the 2-year Treasury. EIB's choice of maturity and structure reflects the strong investor demand in shorter dated maturities in the callable market.

This Global Callable issue is consistent with EIB's strategy of offering large, liquid benchmark issues in Global format to investors and continues to benefit from now regular features that mark EIB's USD funding strategy. The addition of a Global Callable security structure also re-affirms EIB's ability to meet the demand of investors with a wider product range to choose from in USD. The transaction achieved worldwide distribution to institutional and retail accounts across Asia, Europe and the US.

Distribution of the EIB Global Callable was as follows:

• Central Banks/Govt Institutions: 51%
• Fund Managers: 17%
• Banks: 15%
• Retail: 17%

Geographical breakdown:

• Asia: 56%
• Europe and Others: 13%
• US: 31%

EIB's Director General of Finance, René Karsenti, noted, "We are delighted with EIB's inaugural US$ Global Benchmark Callable transaction. Investors around the world have shown strong appetite for this product, confirming EIB's ability to access different areas of the markets using its strong name recognition. With this offering, EIB demonstrates responsiveness by providing investors with an instrument which best suits current market needs.

EIB made an impressive entry into a new segment of the USD market this week with their Debut Global Callable transaction. This large liquid structured bond complements their already successful USD bullet issuance, and the market timing could not have been better. Bear Stearns was delighted to have been selected to Joint-Lead this important issue for EIB, said Heidi Crebo-Rediker, Managing Director and Head of Frequent Borrowers, Bear Stearns, London.

EIB's Inaugural Global Callable Bond has been a great success. EIB proved once again its dedication to meeting the needs of its investor base by issuing a liquid callable bond that attracted demand from all around the world. The soundness of EIB credit, complemented with the commitment and transparency of its funding programme are once again rewarded during this transaction. Goldman Sachs is very pleased to have been appointed Joint-Lead for this transaction said Ed Eisler, Managing Director and Head of Interest Rate Products at Goldman Sachs .

The European Investment Bank recently issued a very successful $3 billion 3-year Global benchmark transaction. Its liquid size and consequent benchmark status, as well as the slightly longer than 3-year maturity led to a healthy oversubscribed book and large investor interest, especially from Asia. The new Global Callable issue builds on the success achieved by EIB's USD Global bullet issuance and provides highly complementary distribution of the EIB credit.

In 2002, the EIB raised 38 billion equivalent in 219 transactions, in 14 different currencies of which USD represented 38%. EIB currently has USD31 billion of benchmark bonds outstanding across the curve of which USD 20 billion are in Global format.

The EIB is the European Union's long-term lending institution, financing capital projects that promote European Economic development and integration. The EIB's shareholders are the 15 Member States. Besides supporting projects in its Member States, its main lending priorities include financing investment to prepare economies of the Accession Countries, mostly in Central and Eastern Europe, for EU membership. The Bank finances itself through borrowing operations.